Quiet Overnight Action On America's Day Off

With US markets taking a day off today for Memorial Day, liquidity will be even more sporadic than usual, and any sharp moves will be that much more accentuated, although such a likelihood is minimal with all US traders still in the Hamptons. In an otherwise very quiet overnight session, perhaps the most notable move was that of the USDJPY, which continues to be "strangely attracted" to the 101 line although selling pressure is certainly to the downside, with a downside breakout quite possible, however that would lead to an early and very unpleasant end to Abe's latest 'experiment' (to quote Weidmann). The Nikkei225 already closed down 470 points, or 3.22%, as Mrs. Watanabe's faith in the market, seems to be fading with every passing day.

The bounce in EUR crosses on a stronger than forecast German IFO survey on Friday proved short-lived and in doing so sent an important message: good macro-economic reports and positive data surprises from the eurozone are being met with a considerable degree of indifference among market participants, whilst disappointing data tends to magnify the downside growth risk and bolster EUR aversion. This proverbial shrug of the shoulders to eurozone data was repeated after the weekly ECB LTRO repayment data. A marked increase in total repayment (LTRO1+2) from EUR1.124bn to EUR8.123bn, the highest since April 19, made no difference even though at the margin the increase and resulting decline in the balance sheet is a positive EUR element. However, turning the argument on its head, an anaemic recovery where liquidity is diminishing (excess liquidity below EUR300bln) will keep the ECB mulling over its options to boost the flow of credit.

This week is unlikely to improve EUR sentiment dramatically considering the mostly second-tier nature of data releases and the greater focus instead of month-end flows in bonds and currencies. The direction of UST yields and the volatility in JGBs cast a large shadow over asset markets last week and wild gyrations in the Nikkei will plead for caution until the dust settles. Rate differentials have been the determining factor for currencies and this will remain the case until we hear from the ECB at the June 6 meeting. Economists will feast on a deluge of EU data including the flash estimate of EU CPI, unemployment and monthly EC confidence data, but to the market this data may not prove extremely relevant.

US and UK markets are closed for public holiday today and the resulting dent in market liquidity will keep many participants sidelined. Norwegian unemployment and Swedish retail sales data are due this morning. The NOK is the second best performer in G10 this month but the SEK took a fresh blow on Friday following disappointing confidence and economic tendency surveys. For EUR/NOK, failure to extend above 7.55 last week looks set to be followed by a return below 7.50 this week. EUR/SEK was denied of a weekly close above 8.60 after a third attempt in five weeks, but downside pressure does not look compelling either with support holding firm at 8.53 since mid-April.

''The idea is as simple as it is ingenious. Wherever roads are laid, solar panels could go instead. They would generate electricity, which would in turn be fed into the grid. Thus, oil is conserved twice: Electric cars could be charged with the energy produced by the panels, and the panels would replace the use of asphalt, the production of which requires petroleum.''

ah, just wait.......they will take this down spectacularly tonight. tomorrow is options expiry, and they don't have it to meet delivery.

what else can they do? and why not? they completely own the regulators........bart and gary..their computers are programmed to completely black out all Cartel activities. So they have complete implausible deniability. And the press, despite all evidence to the contrary, will back them up......

have been saving my cash all month for this big smash up. can't wait. and when i caught the whisper of this "action" on the web, and saw the typical trading signals that the "in crowd" uses to telegraph this week....i nearly went into a coma of total bliss.......

China is studying the possibility of investing a portion of its $3.4 trillion in foreign-exchange reserves in U.S. real estate, said two people with direct knowledge of the situation.

The State Administration of Foreign Exchange began the study after seeing signs of a recovery in the U.S. property market, said the people, who asked not to be identified as they weren’t authorized to speak publicly about the matter. China may acquire properties, invest in real estate funds or buy stakes in property companies, they said. The safety of the investments will be the top priority, said the people, who didn’t elaborate on a timetable or other details.

China has set up an operation in New York to make alternative investments in the U.S., an effort by the country’s foreign-exchange reserves manager to diversify away from U.S. government debt, the Wall Street Journal reported last week, citing people it didn’t identify.

Prices for single-family homes increased in 89 percent of U.S. cities in the first quarter as the housing market extended its recovery following a five-year slump. The median sales price rose in 133 of 150 metropolitan areas measured from 74 year earlier, the National Association of Realtors said in a report on May 9.

“In the long run it should be a good opportunity as the U.S. property market is gradually rebounding,” said Frank Chen, Shanghai-based head of China research at CBRE Group Inc. “It will help diversify the foreign reserves’ investment portfolio. Properties such as office building have stable yields, which match its investment strategies.”